First ABS start-up reports strong first year with barrister-only model

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By Legal Futures

10 July 2013


The Bar: rapid payment

The first start-up alternative business structure (ABS) – offering clients ‘early access’ to barristers – has smashed expectations in its first year and aims to be turning over £500,000 in the next 12 months.

Red Bar Law received its ABS licence a year ago and offers a model where clients get access to barristers and a saving on fees of around 30%.

The firm, run by solicitor John Esplen and business consultant Hatti Suvari, has gone from strength to strength, turning over £200,000 with a 70% profit margin since it officially began trading in September last year.

Red Bar had only anticipated a turnover of £75,000 by this point, and now hope to hit the £500,000 mark by July 2014.

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Though not technically direct access, Red Bar allocates a barrister for a case from the start and helps manage the matter, as well as agreeing a fixed fee.

Ms Suvari said that word of mouth has spread among barristers about the way the firm works, including paying one barrister within six minutes of their work.

And clients have welcomed the quick progression of cases and the alternative model to dealing with “costly” solicitors, she added.

She said: “We have brought together a business element and legal element to the changing legal environment and laid out our fixed-fee model to bring people to the bar at an early stage.

“We pay the barristers within 24 hours, bring the matter forward as quickly as possible from stage to stage and the client knows to the pound the exact cost. We are working on one of the biggest litigation matters in the country on behalf of a corporate client in a landmark case. We have saved him 78% on his legal costs.”

The firm’s website says it can obtain a barrister’s opinion from as little as £75 per hour.

Any work not handled by barristers is done in-house, with overflow going to freelance solicitors. They crux is to get barristers involved in a case at an early stage to bring matters to a close quickly and making the most of barristers lower cost base than solicitors.

Ms Suvari said the “market has reciprocated really well” despite not doing any advertising, with work coming in through recommendations.

She said: “A year down the line we have proven that, executed properly, this model can work. Everyone was frowning at ABS model and looking at the changes to the legal market in a hostile way.

“We’ve gone beyond our targets, the average client saves between 20% and 30% on legal fees and their cases progress quickly.”

Red Bar Law’s success with has caught the attention of solicitors’ firms, Ms Suvari added. “Yes, we are direct competition to solicitors. We are getting clients coming to us and saying that they are not happy with the level of service and cost of solicitors. And firms are watching what we do closely.

“The fact that I’m a non-lawyer and bring the business and strategy elements to the table has proven a good mix. The end consumer is getting a better deal.”

The stamp of approval is that barristers are sending clients to Red Bar, she argued.

“Barristers absolutely love us and now we are getting referrals from the bar itself. They are ringing us to say they’ve told a client they’ll only take the case if they go through Red Bar Law.

“Barristers like how we work, how we produce concise briefs with bullet points, yet take the time to get everything they need by understanding the client and what their ultimate goals are.”

Red Bar Law has access to the entire bar, in theory, and Ms Suvari said that having a limited ‘panel’ of barristers may be a consideration in the future, but for the moment they do not want to restrict themselves.

Often they will get last-minute litigants and because “good barristers are busy people with full diaries” and it pays to have as many barristers on board as possible.

In the past year, says Ms Suvari, Red Bar Law has used the services of between 20-30 barristers who have had “a lot of work on different matters”. Others have been in contact to ask Red Bar Law to “keep them in mind” should a case in a certain area of the law arise.

Ms Suvari explained what the firm is looking for in a Red Law barrister: “Not all are right for us. We like personable down-to-earth junior barristers and the same with our QCs. We interview a barrister before we decide that they have the right synergy with the client.

“Let’s face it, there’s a lot of arrogance in the bar and that’s something we don’t work with. We want barristers who are willing to go the extra mile with sufficient experience for the case, ones who will take the time to have a quick coffee with the client after the case to wrap it up – clients really appreciate that and it shows we care.”

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